Prodi urges Euro reform

By Robin Oakley, CNN's European political editor

European Union leaders have been urged by Romano Prodi, the President of the European Commission, to press on with economic reforms which would mean cheaper pensions and insurance for many millions.

With the world's stock markets tumbling and the Euro still struggling officials in Stockholm conceded that making progress on their economic reform agenda was vital to stop the slide. It is a key test of their political will.

But on the night before the official opening of the EU Summit in Stockholm on Friday EU finance ministers were still struggling to reach agreement on the key proposal -- a method of fast-tracking regulation on financial services to help free up the markets.

Prodi's spokesman Jonathan Faull said in a pre-summit briefing: "It's all about responsibility, credibility and commitment." Prodi, he said, would be urging the 15 national leaders to accept their collective responsibility.

The EU leaders pledged a year ago in Lisbon to turn the grouping into the most dynamic force in the world economy.

Cheaper and easier capital is crucial to growth and job creation in a Europe with 15 million unemployed.

But officials warned that without reform of financial services regulation they had no chance of meeting their ambitious targets.

Saying that the Commission has played its part by making proposals, Prodi is urging action in six specific areas from action plans to deal with the ageing population to full competition on air fares.

Proposals for speeding up the integration of financial services markets have been put forward by a group of "Wise Men" headed by the Belgian banker Alexandre Lamfalussy.

They propose a "fast-tracking" system with a committee of EU ministers and officials approving rule changes on new products and services instead of the cumbersome political processes that can take as long as three years to complete at present.

But there have been objections from the European Parliament, which does not want to lose its rights of scrutiny, and from the Germans, who are nervous that Frankfurt could lose significant business if the system is liberalised.

The economic ministers of the 15 nations are struggling to find a compromise.

With key decisions to be taken on the economic reform agenda, the Stockholm Summit is in danger of being diverted by the visits on Friday of Russia's President Putin and of the Macedonian President Boris Trajkovski.

Mr Trajkovski will discuss with EU leaders the growing conflict with Albanian rebels. Mrs Anna Lindh, the Swedish Foreign Minister, was returning from a fact-finding visit to Skopje to report to the EU foreign ministers on the deteriorating situation.

There will be opportunities too for the EU leaders to discuss the foot-and-mouth epidemic.

But Goran Persson, the Swedish Prime Minister and summit host, says that he does not want them to be dragged into sorting out the economic consequences of the epidemic. That will be left to farm ministers to deal with later.

Summit faces derailment
March 21, 2001

Europa: Stockholm Summit
EU: Swedish Presidency

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